Angeliki Frangou-led VLCC owner Navios Midstream Partners has reported strong profits in its latest quarter and cited increased chartering activity in the market.
NYSE-listed Navios Midstream posted net income of USD5.4 million and adjusted net income of USD7.1 million for 2Q15. The partnership was spun off from sponsor Navios Acquisition via an initial public offering in November 2014.
Navios Midstream acquired two VLCCs from Navios Acquisition in June, bringing its fleet to six VLCCs. “VLCC market fundamentals continue to improve. The decline in the price of oil helps to increase oil consumption and oil transportation,” said Frangou.
“Not only are spot rates up significantly, but the charter market has become very active, with the number of long-term time charters fixed in 2015 year-to-date already significantly greater than the number of long-term fixtures in each of the last four years.”
All of Navios Midstream’s VLCCs are on long-term charters, with its fleet’s time charter equivalent rates averaging USD46,545/day in the latest quarter. While the partnership has missed out on some of the upside enjoyed by pure spot players – given average year-to-date VLCC spot rates of USD56,000/day – it does have profit-sharing agreement on five of its six charters. Navios Acquisition earned USD1.4 million from its profit-share arrangements in 2Q15 and USD1 million in 1Q15.
This post was sourced from IHS Maritime 360: View the original article here.
